The North American Industry Classification System (NAICS) is a classification of business establishments by type of economic activity. It is used by governments and businesses in Canada, Mexico, and the United States of America. The NAICS numbering system employs a five or six-digit code at the most detailed industry level, with the first five digits generally representing the same categories in all three countries. The system is designed to be largely compatible with the United Nations Statistical Offices International Standard Industrial Classification system (ISIC) .
NAICS is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. It was developed to allow for a high level of comparability in business statistics among the three North American countries. NAICS is based on a production-oriented concept, meaning that it groups establishments into industries according to similarity in the processes used to produce goods or services. The system is hierarchical, with a "hierarchy" representing the relationship of one item to a particular category. There are twenty sectors included in the NAICS, and all sectors, except 92, have full or part representation in the economic census.
A NAICS code is a classification within the North American Industry Classification System. It is a self-assigned system, meaning that companies select the code that best depicts their primary business activity and use it when asked for their code. The system was developed for statistical analysis, and various government agencies, trade associations, and regulatory boards have adapted the NAICS classification system for their internal needs. Companies also rely on the NAICS code to classify their own customers by industry and target their marketing efforts to businesses within a particular NAICS code.
